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Policy and Systems

 

 

 
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Annuity Deductions for LPE

Annuity Deductions for LPE

 

Earnings reductions for LPE occur at any age, even after attaining Full Retirement Age. There is no Annual Earnings Exempt Amount for LPE. Even work for minimum pay may be LPE.

Any LPE earnings received by an employee annuitant for service in or after the month the annuity begins, will reduce the amount of the employee's Tier 2 component, the employee's supplemental annuity, if any, and the spouse's Tier 2 component. The LPE work deduction is $1.00 for every $2.00 earned, but not more than 50% of the Tier 2 components and supplemental annuity.

  • Read more about Annuity Deductions for LPE

LPE Exceptions

LPE Exceptions

 

Some types of non-railroad employment are not counted as LPE. These types of work do not affect payment of your Tier 2 component or supplemental annuity. These exceptions are:

  • Read more about LPE Exceptions

Spouse/Divorced Spouse Annuities

Spouse/Divorced Spouse Annuities

 

Overview

  • Read more about Spouse/Divorced Spouse Annuities

Last Pre-Retirement Non-railroad Employment

Last Pre-Retirement Non-railroad Employment

 

Your Last Pre-Retirement Non-railroad Employer (LPE) is defined as any non-railroad individual, company or institution for whom you are working on your annuity beginning date (ABD) or for whom you stopped working in order to receive an annuity. This includes work for a Canadian railroad that is not covered under the Railroad Retirement Act and work as an elected or appointed public official.

  • Read more about Last Pre-Retirement Non-railroad Employment

When to Report Earnings

When to Report Earnings

 

You should report your earnings when you begin or end nonrailroad employment and expect to earn more than the Annual Earnings Exempt Amount to allow timely adjustment or your annuity. Also report if you will earn substantially more or less than you earned in the previous year.

When you tell us that you have begun non-railroad employment or changed your earnings from the previous year, we apply temporary deductions to your annuity based on the amount you expect to earn.

  • Read more about When to Report Earnings

What Earnings Count for Tier 1 Reductions

What Earnings Count for Tier 1 Reductions

 

Tier 1 earnings restrictions apply to gross earnings from your employment for others, plus any net earnings from self-employment. Your net self-employment amount is the earnings amount after business expenses that you report to the Internal Revenue Service (IRS).

Do not include as earnings, any money you received for reasons other than for work you performed. Gifts, interest earned, inheritance, pensions, and investment income do not count as earnings for this purpose.

  • Read more about What Earnings Count for Tier 1 Reductions

Tier 1 Reductions for Nonrailroad Earnings Before You Attain Full Retirement Age

Tier 1 Reductions for Nonrailroad Earnings Before You Attain Full Retirement Age

 

This section only concerns Tier 1 component, vested dual benefit (VDB) or Special Guaranty reductions for age and service annuitants and their families. Tier 2 reductions for Last Pre-retirement Non-railroad Employer (LPE) and the rules for disability annuitants are explained in other sections of this publication.

Your Tier 1 components are not reduced for your nonrailroad earnings if you are receiving social security benefits.

  • Read more about Tier 1 Reductions for Nonrailroad Earnings Before You Attain Full Retirement Age

Non-railroad Earnings After You Attain Full Retirement Age

Non-railroad Earnings After You Attain Full Retirement Age

 

This section applies to annuities based on age and service and disability annuities. For months after you have attained Full Retirement Age (FRA), your Tier 1 component is not subject to reductions because of your nonrailroad earnings.

Determining Your Full Retirement Age

  • Read more about Non-railroad Earnings After You Attain Full Retirement Age

Railroad Work

Railroad Work

 

You must notify the RRB immediately if you go to work in the railroad industry. Do not wait for your employer to notify the RRB.

If you are the employee annuitant, your regular annuity, or any supplemental annuity cannot be paid for any month in which you work for a railroad employer. This law applies no matter how old you are or how much money you earn from that work.

If you are the spouse annuitant, your annuity is not payable for any month you work for a railroad or for any month the employee annuitant returns to railroad work.

  • Read more about Railroad Work

Non-covered Service Pensions and Public Service Pensions

Non-covered Service Pensions and Public Service Pensions

 

A Non-covered Service Pension can reduce your employee Tier 1 component and the Tier 1 component of your spouse, as explained in booklet RB-1, Age and Service Employee Annuity.

A Public Service Pension can reduce your spouse Tier 1 component, as explained in booklet RB-30,Spouse/Divorced Spouse Annuity.

  • Read more about Non-covered Service Pensions and Public Service Pensions

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